Super vision is sadly lacking

So after yet one more set of proposals to alter the superannuation system, where is the much-needed vision towards which we should all be striving?

A comprehensive vision, clearly articulating what the superannuation system should look like, is absolutely fundamental. Unfortunately this is sadly lacking in the Gillard government’s latest move.

There is clear evidence, borne out by CPA Australia research, that the system as configured now is unsustainable. The evidence shows people are loading up on debt and using super payouts to extinguish that debt. They then rely on the pension. For that zero-sum result, the government is forking out $32 billion a year.

While it‘s good that Superannuation Minister
Bill Shorten
has put this crucial issue on the agenda in an election year, we still lack a framework for the discussion. How do you fix a problem when you don’t know what you’re trying to achieve?

For arguments sake, let’s say we should aim for having less than 30 per cent of the population getting the full age pension by 2050. What would it take to make that happen? A workable vision would take into account the different needs and characteristics of three demographic groups: those aged over 60 years, those aged over 40 and those aged over 20.

The system in its present guise was devised with a distinct demographic and economic context in mind. That context has changed significantly. People are living longer and their expectations are different. We need to have an intelligent conversation and adapt our system around a new vision for retirement savings.